Guidelines for local and regional policy makers 01

HOW CITIES CAN BACK RENEWABLE ENERGY COMMUNITIES

GUIDELINES FOR LOCAL AND www.renewables-networking.eu REGIONAL POLICY MAKERS Guidelines for local and regional policy makers 03

TABLE OF CONTENTS

ABOUT THIS DOCUMENT 04

1. WHY COMMUNITY ENERGY? 06

2. WHAT MODELS FOR COOPERATION? 08

3. HOW CAN CITIES SUPPORT RENEWABLE ENERGY COMMUNITIES? 12

AS REGULATORY AND POLICY ENABLER 11 Creating the right conditions for community energy to flourish 11 3.1 Including community ownership target in long term climate and energy strategies 11 3.2 Requiring developers to open projects to citizen participation 13 3.3 Securing urban-rural partnerships 14 3.4 Steering new neighbourhood developments towards community energy 15 3.5 Relying on community-planning and engagement 17 3.6 Procuring energy differently 19 3.7 Establishing a genuine partnership with European and national authorities 22

AS PROJECT PARTNER OR FACILITATOR 24 Provide direct support to community energy initiatives 24 3.8 Creating or mandating a dedicated body 24 3.9 Mapping the potential and matchmaking the people 24 3.10 Providing access to public sites and infrastructures 25 3.11 Securing finance and fundraising 26

AS INFRASTRUCTURE OPERATOR 27 Manage energy infrastructure with community involvement 27 3.12 Offering participation in the local utility 27 3.13 Opening the capital of municipal energy projects 27 3.14 Joining efforts on remunicipalisation campaigns 28

CONCLUSION 29

REFERENCES 30

Cover images » Main picture/picture at the top left: ©World Future Council » Picture below: ©Energy Cities 04 Guidelines for local and regional policy makers

ABOUT THIS DOCUMENT

Energy Cities is a member of the Renewables Net- According to the framework, citizens and energy working Platform (RNP), a multi-level governance communities across the EU will be able to easily invest discussion project funded by the European Com- in renewables and benefit from the energy transition. mission. Its aim is to analyse and boost renewable Their rights to produce, consume, sell and store energy policies by connecting relevant European, energy are now clearly spelled out in EU legislation. national, regional and local players. What better time than now for local authorities to Energy Cities, the European association of local au- be more involved in community energy projects? All thorities in energy transition, supports this project by over Europe, many cities have already been testing connecting and guiding cities in scaling up renewable multiple ways to initiate, support and facilitate such energy solutions on their territories, ultimately con- projects. With this document, Energy Cities aims to tributing to the target of a 32% share of renewable showcase their actions, but also to identify existing energy in the EU’s gross final consumption by 2030. models of cooperation.

Community energy is now backed by new “European We hope to inspire and provide guidance for local rights”, following the institutional agreement around and regional policy makers willing to team up with the new legislative framework for energy in Europe their citizens, to move forward the energy transition (the Clean Energy for all Europeans Package). of their communities.

©inf1783/unsplash.com 06 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 07

regeneration were much greater, with revenues being In addition, community energy projects often include reinvested in local infrastructure and services and strong social imperatives linked to tackling energy 1. WHY COMMUNITY ENERGY? contributing to social cohesion and acceptance of poverty. In many cases, the revenues derived from the renewable energy.1 A few months later, a study con- project are thus reinvested in measures to help vulnera- ducted by the German Institute for Decentralised ble consumers become more active in managing their Technologies also concluded that community-based consumption and sometimes even take ownership in projects produced between 8 to 10 times more for energy projects. local added-value than those carried out by external THE CHANGING ROLE OF LOCAL AUTHORITIES developers.2

The critical contribution of local and regional authorities governments have shown they can have a transforma- in moving towards a decarbonised and renewable-pow- tive effect in enabling new business models, changing NEW EUROPEAN RIGHTS ered Europe is now a widely acknowledged fact. From the way the energy system is governed by encouraging the launch of the EU Covenant of Mayors in 2009 to the a more direct participation of local communities. In 2019, the EU institutions reached a political agree- law. Recognising that a large number of European COP21 local leaders’ summit in 2015, a lot of important ment on all the major pieces of legislation forming the citizens (about 40%) live in apartment buildings, the milestones have been reached. This enthusiasm around Local and regional authorities can support “community “Clean Energy for All Europeans” package, which is set Commission also calls on member states to empower local climate action has however mainly focused on energy” dynamics in various ways: to dramatically influence the future of the energy “jointly-acting” self-consumers, also called collective local and regional authorities as technology enablers. landscape in the next decades. self-consumption. To a large extent, cities have often been considered as 1 involving an entire district in changing its energy laboratories to scale up the adoption of renewable supply mode and consumption patterns One of the major breakthroughs comes from the legal In addition, the directive requires member states to energy services and infrastructures and the implemen- recognition (with associated rights and responsibilities) assess the opportunities and barriers linked to the tation of massive energy efficiency programmes. But 2 teaming up with individuals and cooperatives in granted to individual energy producers and communi- development of self-consumption and renewable much less attention has been devoted to the role they identifying, financing or operating a series of ties. The Renewable Energy Directive indeed now energy communities and put in place enabling frame- can play in changing the power dynamics of the energy heterogeneous green projects provides the right to citizens and “renewable energy works to ensure they have a fair chance to compete market: influencing who plans, owns, controls and communities” to produce, store, consume and sell with other players in the market. Importantly, this benefits from the new energy infrastructures and 3 engaging citizens in the local planning of energy renewable energy without being subject to dispropor- notably means “providing information, providing technologies. Yet over the last few decades, local infrastructure and policies tionate burden and discriminatory procedures. The technical and financial support, reducing administrative renewable energy directive defines a series of criteria requirements, including community-focused bidding based on which any legal entity can be considered a criteria, creating tailored bidding windows for renewable “renewable energy community”: energy communities, or allowing renewable energy commu- nities to be remunerated through direct support where DEFINING COMMUNITY ENERGY 1 Autonomy & proximity principle they comply with requirements of small installations.” A renewable energy community “ is based on “Community energy” can indeed encompass a number a renewable energy project.” According to the UK open and voluntary participation, is autonomous, Likewise, a definition of“citizen energy communities” of different aspects and activities. Attempts to define Community Energy Coalition, “the emphasis is very and is effectively controlled by shareholders or is also included in the EU electricity market legislation the concept have been made by various organisations, much on projects involving local engagement, leader- members that are located in the proximity of the together with a requirement on member states to put in including the International Renewable Energy Agency ship and control, and where there is a benefit to local renewable energy projects that are owned and place legal framework to enable their activities and (IRENA), the Coalition for Action which defines it as “the communities.” In this guidebook, the structure and developed by that legal entity”; guarantee their right to engage in local energy genera- economic and operational participation and/or owner- examples proposed will reflect this broader definition, tion, distribution, aggregation, storage, supply or ship by citizens or members of a defined community in but with a strong focus on renewable energy. 2 Local authorities as eligible shareholders energy efficiency services. Its shareholders or members “are natural persons, SMEs or local authorities, including municipali- Lastly, the renewable energy directive also includes ties” provisions requiring integration and deployment of renewables self-consumption and renewable energy SOCIO-ECONOMIC BENEFITS: “GENERATING MORE THAN RENEWABLE ENERGY” 3 Community benefits communities in spatial planning and renovations The primary aim of a renewable energy communi- of urban infrastructure. In its 2018 “State of the Sector” report, the non-profit 2016, two separate studies looking specifically at wind ty should be “to provide environmental, economic organisation Community Energy England sets the scene energy concluded that community-based wind power or social community benefits for its shareholders For a more detailed analysis of all the new provisions by saying that “Community energy continues to provide projects contributed about eight times more to local or members or for the local areas where it of the directives please read the joint publication far more than the generation of renewable energy, with development than those implemented by traditional, operates, rather than financial profits.” “Unleashing the power of community renewable energy”. organisations working hard to deliver environmental, investor-owned companies. One of the two studies social and economic benefits for their local areas.” Very analysed the income and employment effects of Selling excess production of electricity through peer- Visit: true in the UK, this assumption has also been corrobo- community projects in three groups of Scottish islands, to-peer energy trading (directly or through an aggre- www.energy-cities.eu/IMG/pdf/community_energy_­ rated by various studies carried out across Europe. In and found that opportunities for local economic gator) is also a new right now enshrined in European booklet_2018_en.pdf 08 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 09

In figures Finally, the initiative proves instrumental in helping the city experiment new partnerships, »  5,000 m2 of solar »  13% of vulnerable households 2. WHAT MODELS FOR COOPERATION? frameworks and regulations on how to make panels to be installed targeted in the total number local green energy production and supply a by the end of 2019 of participating families fair and profitable business model.4

GAME CHANGING Cities and communities can cooperate through very innovative processes at various stages of the “energy value chain”, from energy production to MODELS OF distribution and supply, through energy savings, balancing and storage. In CITY-TO-CITIZENS the below examples, we give a non-exhaustive outline of existing models JOINT INVESTMENT COOPERATIVE (see chapter 3.8 & 3.10) PARTNERSHIPS and new trends of city-to-citizen cooperation across the various functions A city-co-owned investment cooperative in Mouscron – Belgium and components of the energy system and through different organisational structures.

A growing number of local authorities are investing in This translated into a reduction of CO2 emissions, cooperatives that support the deployment of renewable contributing to the city’s political commitment and energy projects in their region. This is notably the case also helped boost local jobs and economic activity of the city of Mouscron, Belgium, which in 2017 in the city. launched the “Coopem” (Cooperative Energy of SMART GRID DEVELOPMENT PARTNERSHIP (see chapter 3.8 & 3.10) Mouscron) together with a group of citizens and two In figures A fair and smart grid project in Ghent – Belgium other partners. The city owns a 15% share in the cooper- ative, with the majority 55% stake belonging to the »  Members of the cooperative were given citizens of Mouscron and the remaining 30% to a green dividends of up to 6% as of the third year How can people with no suitable roof invest in and The EnerGent cooperative provides citizens with the investment cooperative and company. On top of an of operation benefit from solar energy? How can we make sure opportunity to invest in local solar power production by expected yearly return on investment of up to 6%, the financed panels reach the houses of vulnerable acquiring the photovoltaic panels. In addition, an the first members to join the Coopem were granted »  The local authority owns 15% of the shares consumers with no means to invest, but also schools, electric car-sharing cooperative called Partago is a favourable tax rebate on their investments. in the cooperative with citizens having the businesses, and a maximum number of buildings? And making electric vehicles and charging stations available majority stake with 55% how can all of this be done without overloading the to allow for the excess power that is not directly The activities of the cooperative focus on helping already congested electricity grid? To address these consumed to be used in the charging stations or stored households install solar PV on their roofs. The Coopem »  Households wishing to invest in solar energy questions, the city of Ghent initiated a very unique in the car batteries. And to complete the picture, the removes the barrier of high upfront costs by advancing were granted a 45% prefinancing disbursement cooperation with a number of local partners and project will experiment with storing electricity in the payment of regional solar subsidies, normally from the cooperative which provided advance launched the “Buurzame Stroom” (neighbourhood batteries on household level. granted over a five-year period. It also handles the payment of the regional subsidy power in Dutch) pilot scheme which started operation overall technical and administrative process from A to in 2018. The project covers a specific neighbourhood, with plans Z. This notably involves the joint purchase of equipment to install some 5000m2 of solar panels by the end of from local suppliers as well as the monitoring and The partners include two energy cooperatives, the 2019, targeting residents with different profiles (families validation of the installation process. In the end of 2017, Ghent university, which acts as a trusted, neutral with migration background, transit inhabitants, elderly the cooperative completed the joint purchase of 31 contributor, a social protection association that is people, vulnerable social groups3) and various types of solar installations for Mouscron’s households. notably tasked with reaching out to vulnerable house- building ownership structures. This multi-stakeholder holds and the local distribution system operator. As cooperation, with strong citizen involvement, is proving Additionally, local businesses are also a target group explained above, the plan of this ambitious consortium very successful. of the Coopem, which offers them a leasing plan for is to maximize the potential for locally generated the installation of solar PV panels, financing 90% of energy in the neighbourhood, “equally sharing the costs The role of the city in the project is proving crucial as it the initial investments which is paid back over a ten- and benefits without having to expand the present elec- supports the overall coordination, makes links with year period through the selling of green certificates. tricity grid”. The two cooperatives each have different other initiatives in the city and interfaces between the missions and provide various engagement opportuni- various partners, including in case of potential conflicts Thanks to the “turnkey solution” provided by the ties to citizens. Ecopower, which is the largest energy on the role and responsibility of each player. Overall, cooperative, the households and businesses that cooperative in Belgium, plays the role of aggregator, this “fair and smart” grid project is helping make solar benefited from the installations were able to get easier incentivizing and empowering households to better profitable and affordable to a large group of stakehold- financial and technical access to solar energy invest- control their energy consumption through demand ers, optimising energy production at local level by ments and substantially reduce their energy bill. As response management via smart meters and open data better matching supply and demand and creating a regards members of the cooperative, they were able applications. sense of community in the targeted neighbourhood to receive positive returns on their investment, directly thanks to a very collective and participative approach. participate in the city’s energy transition and support all the cooperatives’ decisions through the one member – one vote principle. ©Stad Gent ©Stad 10 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 11

JOINT ENERGY UTILITY (see chapter 3.11) JOINTLY OWNED ENERGY INFRASTRUCTURE (see chapter 3.12) Citizen participation in the ownership and governance of the local utility, Wolfhagen – Germany Wind blowing near the harbour directly profits the city and its community inCopenhagen – Denmark

In certain countries, energy utilities are jointly owned its electricity grid. In 2003, the then Stadtwerke The Middelgrunden wind farm in Denmark is a famous the cooperative members, thereby increasing their and operated by local authorities and citizens. This is director convinced the local politicians to seize the success story of a city and community co-owned awareness and perceived contribution on energy issues. sometimes due to a strong tradition of cooperative opportunity of E.ON’s expiring 20-year concession large-scale energy project, and one of the largest The cooperation between the two parties has proven a ownership. In the case of Denmark for example, where contract to take control over the distribution net- offshore wind farms in the world. The story dates back win-win partnership, and a very emblematic case of district heating is the most common heat supply model, work. After three years of intense negotiations (due to to end of the nineties, when a newly set-up energy Denmark’s leadership on community energy. While the the heat networks are usually operated by non-profit E.ON’s resistance and the need to clarify a lot of cooperative started to engage in planning and contrac- local utility provided technical and legal expertise, the companies jointly owned by cooperatives and munici- technical, commercial and legal issues), a deal was tual discussions with the municipally-owned energy cooperative’s involvement was crucial in securing local palities. In other cases, community ownership is the finally reached in 2006. Today, the Stadtwerke makes a utility of Copenhagen on the construction of 20 wind enthusiasm and community engagement.7 result of socially and politically-motivated remunicipali- profit every year, the number of employees has nearly turbines (2MW each) located a few kilometres outside sation campaigns, to bring privatised energy networks doubled and it has won international prizes for its the harbour of the city. In 2003, the local utility sold its 50% share to a private back into local control. In Germany the remunicipalisa- innovative projects on energy savings. Since 2005, Danish energy company, and bought it back in November tion movement has led cities to create fully-integrated some 284 municipalities6 have followed Wolfhagen’s During the testing and construction phase of the wind 2018 in order to repower the park and extend the post- energy companies (covering the whole value chain of lead, including Hamburg, the second largest city in farm, costs and revenues from the first turbines in 2025 lifetime of the wind farm by an additional 25 years.8 production, distribution and supply)5 where citizen Germany, in regaining power over the energy sector operation were equally split between the local utility cooperatives have sometimes been offered financial and the cooperative. After completion of the scheme in In figures ownership and voting power. In figures 2000, the two co-owners started functioning as two separate entities, with the 8,500 members of the »  According to the Copenhagen climate plan, In Wolfhagen, a city in Northern Hesse, the local »  Citizens own a 25% stake in the local utility, cooperative owning and managing the 10 Southern local cooperatives will be able to invest in the “stadtwerke” supported the creation of a citizen while the remaining 75% is fully owned by turbines and the local utility the other 10 up North. additional 100 new wind turbines that the cooperative which now owns 25% of its capital and the city itself The cooperative functions according to a democratic local utility plans to develop by 2025 contributes to the strategic orientations taken by the governance model, with each member having one vote utility, with two representatives of the cooperative »  The stadtwerke achieved its 100% renewable independently of the number of shares owned. The »  The yearly power output of the farm is the sitting in the nine-member supervisory board of the energy target in 2014, one year ahead of project also has an educational component, with one of equivalent to the consumption of 30,000 Stadtwerke. Interestingly, the 14, 000 inhabitant town schedule the turbines baptised the “childrens’ wind turbine”, local households was also one of the first German cities to remunicipalise giving youngsters the opportunity to vote on behalf of

LEASING ENERGY FROM COMMUNITIES (see chapter 3.12) The 30 citizen power plants of Vienna – Austria

When cities are in charge of the deployment and In 2017, 30 plants were installed based on this model, operation of renewable energy infrastructure through with a 19MW installed capacity, and 35 million EUR has their local utility, very creative methods for community been invested by the approximate 10 000 participating involvement can be engineered. This is notably the case citizens. The panels have been installed on a very varied of Vienna, where the Stadtwerke WienEnergie started set of locations including train stations, shopping selling solar photovoltaic modules to citizens in 2012. centres, public schools, cemeteries, social housing The interest was immediate: for the first two solar estates, etc.9 power plants on which the city experienced this model, the panels were all reserved in one week. Once the third This solution enabled Viennese citizens, the majority of plant was built, it took just about 24 hours. whom live in apartment buildings with complex owner- The innovative model functions as follows: the citizens ship structures or no suitable roof, to nonetheless in buy the panels from power plants that are built and invest in and benefit from solar energy. operated by Wien Energy and lease them back to the utility. WienEnergy pays them a yearly remuneration in In figures the form of direct wire transfer on their accounts, or through yearly shopping (with the partnering supermar- »  Over 35 million EUR has been invested ket chain Spar), electricity or gas vouchers. The yearly by the 10,000 participating citizens interests have ranged from 1,75% to 3,1% for a five-year contract duration. Once the lifetime of the panels has »  Some 30 citizen power plants installed, saving expired (after approximately 25 years), Wien Energy some 17,000 tonnes of carbon, equivalent buys them back from citizens and the full amount is to the yearly emissions of about 2,500

©Energieoffensive Wolfhagen, Facebook Facebook Wolfhagen, ©Energieoffensive returned. European citizens 12 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 13

THE SCOTTISH MODEL  CAN CITIES SUPPORT 3. HOW Explicitly mentioning support for community energy in on this momentum, the government updated its 2020 RENEWABLE ENERGY COMMUNITIES? policy strategies makes a crucial difference. target to 1 GW and pledged to reach a total to 2 GW of At the national level, Scotland provides one of the most local and community energy installations by 2030. “Our striking examples of such a target-setting policy for ambition remains to ensure that, by 2020, at least half community energy scale-up. In 2011, the government of newly consented renewable energy projects will have pledged to reach 500 MW of “locally- and commu- an element of shared ownership », says the government nity-owned” installed renewable energy sources by policy statement on the matter.12 AS REGULATORY AND POLICY ENABLER 2020. Four years later in 2015, reports already indicat- Creating the right conditions for community energy to flourish ed that the target had been exceeded, demonstrating Interestingly, this example inspired the government of the effectiveness of such a commitment, as it led the Wales which also set a target for locally and communi- Scottish authorities to adopt a set of corresponding ty-owned renewable electricity by 2030.13 technical and financial support instruments. Building

3.1 Including community ownership target in long term climate and energy strategies GROWING PRESSURE FROM FRENCH CIVIL SOCIETY In the framework of the COP21, hundreds of local authorities have committed to be 100% supplied by renewable energy at the latest by 2050. Achieving this ambitious goal will require mobilising large Following the Scottish footsteps, a rising number of ad- December 2017 formally appealed to the government to amounts of private capital – which is available in the form of citizens’ savings – but also public support vocacy groups are now starting to call on their national adopt a 15% target of citizen or local-authority-owned for new energy policies and infrastructures through a shared ownership and governance model. governments to adopt similar policies. It is notably the and controlled renewable energy capacities by 2030. All of this calls for increased community involvement, not only through one-off projects but via case of the “citizen energy” coalition in France, which in a comprehensive and coordinated strategy backed by a long-term commitment.

FOUR LOCAL AUTHORITIES WITH CONCRETE TARGETS FOR LOCAL AND COMMUNITY ENERGY DEVELOPMENT 3.2 Requiring developers to open projects to citizen participation

In the county of Cornwall, UK, the 2016 – 2030 local The city of Ghent, Belgium, has a target of 15% of plan’s section on renewable and low-carbon energy residential energy consumption to be covered by INSPIRED BY THE DANES states that “support will be given to renewable and locally produced renewable energy by 2019. In 2011, low carbon energy generation developments that [...] the city had already reached 7.5% and is well on Since 2009, the Renewable Energy Act imposes on all energy revolution, with huge impacts on the econo- are led by, or meet the needs of local communities”.10 track to reach the 15% milestone. Additionally, the wind energy developers the obligation to offer a 20% my. As an indication, the sector now employs some city has a very ambitious methodology to account ownership share to residents living near new installa- 85 000 people and alone makes up as much as 3% of In Germany, the district of Steinfurt, which gathers for what it considers “local production”, ruling out tions. This community-centred approach to renewables Denmark’s GDP, according to the Danish Wind Industry 24 municipalities representing some 445,000 for example the inclusion of a large 100% biomass is what helped the country unleash a genuine wind Association. inhabitants, plans to become 100% self-sufficient power plant located in its constituency. in renewable energy by 2050, largely through com- munity involvement. Studies commissioned by the In addition, the 2014-2019 coalition agreement notes local administration have concluded that self-suffi- that at least 30% of the total energy consumption of ciency could only be achieved “by operating in a re- city buildings must be covered by solar energy, with THE CASE OF BELGIUM gionally decentralised manner” and that it “wouldn’t a minimum 50% participation from Ghent work without the citizens”, according to an interview citizens. In Belgium, most of the competences on energy are re- In Flanders energy cooperatives are advocating for the with the officer in charge of climate protection.11 gionalised, except for large scale infrastructures which Flemish Parliament to adopt such a decree whereby include nuclear energy, offshore wind and high tension exploitation permits given to renewable energy pro- lines. ject developers would be conditional to their offering a minimum 50% ownership share to citizens. Although In the Walloon region, local authorities and coopera- they do not have the competence to deliver permits, 2 tives have managed to push forward a regional rec- provinces and over 20 municipalities in Flanders have ommendation specifically for wind projects, requiring already shown the way, by politically supporting such that project developers should offer 50% community a target for renewable energy installations in their participation (25% by the citizens and 25% by the constituencies. municipality).14 14 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 15

A NEW POLITICAL SIGNAL IN THE NETHERLANDS 3.4 Steering new neighbourhood developments towards In the Netherlands, within the framework of the 2030 agreement process might be considered time consuming, community energy national 2030 climate agreement, a decision was taken it still is expected to prevent projects from being delayed that solar and wind energy developers should open by costly legal challenges that can take years to solve. As land use planners, local authorities can take advantage of urban development plans, such as new 50% of the capital of their projects to local communities. eco-friendly neighbourhoods, to lead project developers towards community energy solutions, includ- Each new development should be the subject of an This principle should be enshrined in the soon-to-be ing collective self-consumption. Plans to refurbish or create 100% renewable district heating networks agreement with the local community where the energy adopted national climate and energy plan that the can also be associated with objectives to improve citizen participation in the energy system. This is for infrastructure will be deployed, following an extensive country has to submit to the European Commission example the case when concession contracts are awarded to citizen cooperatives, as in the below public engagement process. Although this local by end of 2019. example of Eeklo, Belgium.

3.3 Securing urban-rural partnerships In high-density urban areas, while energy demand is high and there might be appetite to invest in green THE LYON CONFLUENCE PROJECT projects, options for deployment of large-scale renewable energy installations are very limited. As cities and metropolitan areas have a “structural energy resource deficit”, their plans to be supplied by 100% As part of its Covenant of Mayors Sustainable Ener- renewable energy will thus depend on the partnerships they will be able to strike with their rural hinter- gy Action Plan, the Greater Lyon local authority has land to benefit from the surplus production of their plentiful wind, biomass, agricultural resources, etc.15 assigned a public redevelopment company (SPL Lyon But beyond this purely practical consideration, there is also the political challenge to ensure that energy Confluence) to carry out what is considered as one of generation projects also contribute to aspirations for a new solidarity economy, which have resonated the biggest urban renewal projects in France. The Lyon a lot in municipal elections across Europe.* Local authorities are thus going beyond competition logics Confluence scheme will see the building of 1 000 000 to create genuine territorial alliances of cooperation, sharing competences and resources to m² of new dwellings, offices and shops in a former collaborate on concrete projects with citizens and stakeholders from neighbouring municipalities. industrial area of 150 ha in the city centre. The project, which has already begun and is set to be completed by 2030, is to make all new and existing buildings in the ENSURING BROAD OWNERSHIP area completely carbon-free.

In parallel, the notion of a “just transition” also supposes investments via Lendosphere, a French crowdfunding Collective self-consumption is being tested as part of citizen energy projects with heterogeneous ownership website dedicated to sustainable development projects, this neighbourhood development plan, notably thanks from a geographic and social point of view. This is to 13% of all nationwide investments on the platform came to a local building policy which obliged real estate be factored in for example when community shares are from Paris citizens alone.16 Local authorities can thus developers to include onsite renewable energy instal- raised for a new renewable energy project, to avoid play an important role in ensuring that residents living lations in the new construction projects. Ambitious situations where more deprived communities see new in the immediate neighbourhood of installations are tendering specifications will thus lead the selected installations as an imposition on their landscape from given a fair chance of becoming involved in the gov- project developers to equip 12 000 m2 of building units, well-off city dwellers. In France for example, a recent ernance and financial ownership of the project through including student dwellings, a crèche, commercial and study has shown the greater financial weight of the Par- targeted communication campaigns and specific re- office spaces, with a collective self-consumption PV is region in terms of project ownership located outside quirements on project developers. facility. The national energy utility EDF is in charge of of its geographical perimeter. According to reports on the overall management and contractual arrangements with the prosumers engaging in the collective self-con- sumption scheme. The model functions as follows: each person or company that buys a building unit is enti- tled to a share of the PV system corresponding to the PARIS’ 2020 OBJECTIVE: SUPPORTING COMMUNITY POWER IN COOPERATION WITH RURAL AREAS surface of the purchased unit. When the PV system will be in operation, the electricity bill from that individual, In Paris, the local authority is planning to create a the Greater Paris Metropolis, the opportunity to public institution or company will be reduced by the cooperative supplier of renewable energy by 2020 create a community operator of renewable ener- amount of self-consumed energy that corresponds to that would foster a win-win partnership between gy supply between territories for local authorities the allocated share in the overall PV system. the city and its hinterland. More specifically, the promoting new forms of partnerships with rural city’s 2050 climate plan says the following: “Paris will areas, taking into account issues related to energy It is expected that the new system should cover as study, along with other local authorities including carriers.17 much as 50% of the electricity demand, with the help of a local storage installation.

* In the 2015 Spanish municipal elections for example, a new constellation of political forces (including Ahora Madrid, Barcelona en Comú, and Cadiz Si Se Puede) for the first time challenged the well-established parties in Spain’s largest cities. At the heart of their programmes were calls to rebalance power towards underrepresented groups and guarantee new

forms of social and economic justice. ©rh2010/stock.adobe.com 16 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 17

COLLECTIVE SELF-CONSUMPTION: A NEW TREND ACROSS EUROPEAN CITIES 3.5 Relying on community-planning and engagement Local authorities have understood better than national governments that citizens ought to be consid- Citizens, businesses, schools and other public for economic revival, following an era of industrial ered as more than passive users of public services and infrastructures. While at national level, energy facilities sharing power with their neighbours is decline in a city that was a former textile power- and climate planning has typically happened with virtually zero civil society involvement, cities have a becoming a new trend in countries like Germany. house. Now, the town is a national success story, long tradition of involving their communities in their long-term plans for sustainable development. In Heidelberg for example, a local energy citizen reportedly the first local authority to experiment cooperative is active in a project where it acts as a collective self-consumption following the installation Local and regional authorities never lack creativity when it comes to designing new institutional meth- “mini utility”, cooperating with the local distribution of photovoltaic panels on the roofs of several public ods, platforms, networks and instruments for increased community engagement. Such instruments system operator to allow the 116 residents of buildings, coupled with an energy storage solution. usually provide a mechanism by which local authorities can target and support groups, nurture ideas, a cooperative housing block equipped with 7 PV The “energy positive” roofs of the local church and share knowledge, discuss challenges and opportunities linked to the policy, regulatory and funding systems, to collectively self-consume the onsite-­ school now provide power to other buildings and environment around energy and climate projects. produced energy at a cost efficient price and buy facilities in the neighbourhood. In addition, the solar any residual power from the grid.18 panels of the Brassens school were co-financed by citizens through the Lendosphere crowdfunding In France, this is slowly becoming a new trend with platform, allowing the city to raise some 50 000 THE “DECIDIM” DIGITAL PARTICIPATION an official legal backing in the French Energy Code EUR while granting citizens a 2,25 % return on their PLATFORM IN BARCELONA which considers collective self-consumption as the investments, more than what savings account supply of electricity from one or more producers to currently offer in France. Decidim is a collaborative project which encourages one or more consumers organised through a legal citizens of Barcelona to use a digital, open-source entity and located on the same medium/low voltage In Wallonia, the regional government adopted in participatory platform to suggest, debate, comment substation. With increasing energy retail prices and November 2018 a decree proposal to provide a legal and back new proposals for the city. The platform is unfavourable conditions for the injection of ex- framework on the issue of collective consumption. a concrete output of the 2015-2019 municipal plan cess power to the grid, collective self-consumption The proposed legislation introduces a new player: called “73 neighbourhoods, one Barcelona, Towards schemes at building or district scale are becoming the operator of collective self-consumption, a role the city of rights and opportunities” and which gath- an increasingly attractive business model in Europe- which can be played by a cooperative, a neighbour- ered the input of some 40 000 people. Catalonia’s an cities. hood association, local authorities, groups of com- first renewable energy cooperative, Som Energia, panies, etc. The Brussels and Flanders regions are has used the Decidim platform to host its 2018 Gen- In the 6000-inhabitants town of Malaunay in Nor- also in the process of adopting legislation on eral Assembly and various debates with cooperative mandy, France, local and citizen-led renewable the issue. members and interested citizens, including some energy projects have backed the city’s strategy 3 500 participants and recording some 1 300 votes. ©JackF/stock.adobe.com

A 100% RENEWABLE HEAT NETWORK WITH MINIMUM 30% CITIZEN PARTICIPATION – EEKLO – BELGIUM PARTICIPATORY BUDGET TO FINANCE THE PARIS CLIMATE PLAN In 2016, the city of Eeklo issued a concession 3 The project developer must commit to take contract for the construction of a district heating initiatives to tackle fuel poverty in the city Through the participative budget mechanism, network (DH) supplied from residual heat (including Parisians can propose investment projects for their from a local incinerator and hospital) and renewable The contract was awarded to the Belgian citizen district or the greater city area. Today, 5% of the in- energy sources with very ambitious criteria: cooperative Ecopower in partnership with the French vestment budget of the city, representing about half transnational company Veolia. The 30km-long DH a billion EUR until 2020, is earmarked for projects 1 The contract for difference principle: network, set to be the biggest of Flanders, has the put forward by citizens. the price of the renewable heat should not potential to provide all houses and businesses in exceed that of individual heating with a Eeklo with heating and domestic hot water. In 2017, the participative budget envelope reached gas boiler, including purchase, installation, over 100 million EUR. To support climate-friendly consumption and maintenance 4 Switch to 100% renewable heat by 2036 initiatives from Parisians, the city has announced in its climate plan, published in November 2018, that 2 At least 30% of the grid should be owned by 20% of the participatory budget envelope would be 19 local citizens earmarked for climate-related actions. ©Ruslan Gilmanshin/stock.adobe.com 18 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 19

PROJECT-SPECIFIC COMMUNITY INVOLVEMENT 3.6 Procuring energy differently

In this respect, the example of Lyon Confluence shows nities, owners and real estate developers, journalists, Local and regional authorities can also have an impact on how and from whom energy how this can happen in the framework of a very specific opinion and policy makers along with all other relevant is purchased, whether by adapting their own processes or by helping community groups initiative. Indeed, besides being one of the biggest ur- stakeholders. A participatory committee, made up of make more informed decisions. ban renewal projects in France, it is also very ambitious the socio-economic, cultural and governance players of in terms of stakeholders’ involvement. Since the early the district, monitors the evolution of the project and is phase of the project, an “urban living lab” has been cre- chaired by the Vice President of Greater Lyon in charge ated to encourage citizens to participate in the dialogue of participatory democracy. The “Maison de la Conflu- BULK BUYING SCHEMES and co-design of the smart and sustainable district. ence” has also been created as a permanent dialogue platform to host exhibitions, debates, workshops and Municipalities can help renewable energy communi- Switch” which led 300 000 people to register to the The idea was to integrate the expertise and opinions conferences on the project evolution. ties to better manage their energy choices in general first collective switching initiative in the country, put- of the local businesses, the neighbourhood commu- through various mechanisms. An interesting model ting five energy suppliers in competition to deliver the to drive down energy costs while supporting a more cheapest electricity. Interestingly, the winner of the bid collective approach to energy procurement is the bulk was Co-operative Energy, which seeks to establish an purchasing of power from energy suppliers. ethical alternative to the “Big Six” energy suppliers and now offers a 100% renewable energy supply to all its Tried and tested in the Netherlands, this approach has customers. As a result, it was estimated that households led municipalities to negotiate better deals from energy could save up to £183 on their yearly energy bills thanks providers for groupings of citizens, drastically driving to the switch. In a comment to the Guardian newspaper, down costs and allowing for as much as 20% savings the director of the campaign said that the fact that one on household energy bills. This “aggregating and nego- of the smaller suppliers, Co-operative Energy, was able tiating” model has resonated a lot in the UK where fuel to win shows that “collective switching can help shake poverty is high on the political agenda. In 2011, a UK up the market for consumers and marks an important consumer group launched a campaign called “The Big step on the road to energy market reform.”

PUBLIC PROCUREMENT

Local authorities have a significant energy demand to meet, considering the energy they need to heat and power a various host of public buildings and facilities such as hospitals, schools, municipal swimming pools, community centres, street lighting, etc. Through their tendering policy, they can make sure the energy they purchase not only comes from renewable energy sources, but also that it is in line with their vision to scale-up community ownership. ©Energy Cities ©Energy 20 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 21

THE CITY OF GHENT USES INTERNATIONAL COOPERATIVE ALLIANCE CRITERIA FOR PUBLIC TENDERS

When issuing tenders for new renewable energy ca- In addition, to be qualified under this criterion, pacity, the city of Ghent has already experimented projects with a participative dimension must aim for a few times a system of award criteria where price a minimum 30% citizen participation. This minimum competitiveness is far from being the only bench- threshold was established as a reaction to big utili- mark. While the price parameter weighted 60 points ties taking market share away from cooperatives by in the balance, the qualitative criterion of “participa- adding very marginal elements of crowdlending to tory financing according to the International Coop- their projects. erative Alliance principle” has a 40 point weighting.

At national level, the mainstreaming of auctioning mech- of local involvement. Following pressure from nation- anism to replace feed-in tariffs has had a very negative al advocacy groups, the French regulator even made impact on the development of cooperatives in most EU a distinction between participatory financing projects member states. As a result, and following intensive advo- co-funded through crowdfunding platforms (1€/MWh) Cities ©Energy cacy activities from NGOs, city and cooperative umbrella and the ones owned by local and public players through associations, the European Commission has included actual capital investment (3€/MWh). This distinction provisions in the renewable energy directive that calls was meant to reward projects that benefit from genuine upon Member States take the specificities of renewable territorial anchorage and involvement, inviting citizens energy communities into account when designing sup- to form part of the governance of the projects. “Projects POWER PURCHASE AGREEMENTS (PPAS) port schemes. Such an approach already exists in France, that involve citizens in the governance are more com- where public tenders offer premiums to renewable plicated to set up and take more time, making them a A Power Purchase Agreement is a long-term contract Local authorities could also consider PPAs to support energy projects co-financed by citizens or municipalities. little more expensive. Therefore, they probably require a between an energy generator and a power purchaser, the development of new renewable energy capacity The calls for tenders of the French Energy Regulatory higher bonus,” said the energy director from the French in this case the city, to buy all the electricity generated while potentially including criteria specifically targeting Commission indeed foresee a “participatory bonus” that ecological transition ministry. In the latest calls for by the renewable energy installation. The formal local, community-led renewable energy projects. For varies from 1 to 5 EUR per megawatt-hour, depending on tenders, 40% of the capital of projects had to be agreement specifies the volume, price, and duration for the community project developers, local authorities the energy technology (5€/MWh for biomass projects held by citizens or local authorities.20 which the electricity will be sold, and can span anything bring very good credit ratings, long-term stability and and between 1 and 3 for wind and solar) and the level between 7 to 20 years. With the progressive phase out access to cheap finance. of subsidy mechanisms, types of long-term contracts are becoming more and more favoured by corporate Popular in the United States, this direct marketing of consumers in the renewables market and are an oppor- green electricity should soon become more common in tunity for renewable producers to access funding and Europe, thanks to a requirement from the new renewa- bring new projects online. ble energy directive for EU governments to remove all COMMUNITY CHOICE AGGREGATION IN THE US administrative barriers hampering their deployment. In this context, a European alliance called the RE-source Platform has been formed to raise awareness of the In the United States, collective switching schemes customers” which are given a notification with the various models of renewable energy sourcing in Europe. have been in place for a longer period than in Eu- opportunity to opt out the scheme. This model, rope. More particularly, they have been developed democratically-controlled by the municipalities usu- through the use of an innovative process called ally involves cheaper, more environmentally progres- “Community Choice Aggregation”. Through this sive supply options, supporting the local economy. BRISTOL ENERGY COMPANY SUPPORTING COMMUNITY PROJECTS THROUGH PPAS model, a locally-based, non-profit public agency is set up and tasked with aggregating the demand of Community choice aggregation is subject to various the participating communities to source supply from specific regulatory conditions. So far it has been In the UK, the Bristol Energy company, owned by able energy generation. Its main method to do that, alternative generation suppliers rather than from implemented in seven state jurisdictions (covering the City Council, is committed to being a force for as advertised on the company’s website, is to offer a competing retail suppliers.22 The municipally-con- 25% of the US annual electricity demand) with some social good. As such, it pledges to support commu- range of Power Purchase Agreements that can best trolled utilities then automatically supply “default 1 300 participating municipalities.23 nity energy projects and their investment in renew- suit the needs of community projects. 22 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 23

THE “KLIMAATAKKOORD” – PARTICIPATIVE ENERGY AND CLIMATE PLANNING IN THE NETHERLANDS 3.7 Establishing a genuine partnership with European and national authorities

ENSURING A GOOD TRANSPOSITION OF THE RENEWABLE ENERGY DIRECTIVE IN NATIONAL LEGISLATION

Access to well-designed support schemes, cost of Additionally, the renewable energy directive now calls capital and overall investor certainty are all important upon Member States to prevent a further retreat of elements that help smaller community groups with few- the citizen energy movement by creating an “enabling er resources than corporate utilities to make the leap framework” for renewable energy communities. In this for less-certain investments. In the last couple of years spirit, the legislation also requires the creation of however, regulatory hurdles posed by member states national one-stop-shops to limit citizens’ exposure and the move to more market-based support mecha- to administrative burden. Last but not least, it also nisms, with fierce competition, has affected traditional seeks to increase investors’ certainty by prohibiting business models. retroactive changes to the implementation of support schemes, which have harmed numerous community To address this challenge, new definitions of commu- groups around Europe. nity energy groups (in the renewable and electricity directives) have been adopted as part of the EU Clean As these provisions will now have to be translated Energy for All Europeans Package to provide official into national legislation, local authorities should act recognition and support to these emergent market as watchdogs to monitor and influence development players. As regards collective and individual prosumers, of national policy in this respect. A good example of such a participatory process roadmap on how to achieve the country’s share of the right to produce, consume, store and sell electricity exists in the Netherlands. In 2013, the Dutch govern- the EU objectives for renewable and energy efficiency without being exposed to disproportionate charges is ment adopted its first ever integrated energy and targets. However ambitious, this first agreement also being enshrined in European legislation. climate plan following an extensive multi-stakehold- was reported to have three caveats: the Parliament er collaborative process. Under the guidance of the was not involved, the process was too top-down social and economic council, the agreement was the and responsibilities not clearly assigned. Following result of negotiations and debates among some 47 the 2017 national elections, a new process was put parties, including representatives from trade unions, in place, inviting all the stakeholders to negotiate a ECHOING THE LOCAL VOICE IN EU AND NATIONAL POLICY MAKING local and regional governments, NGOs, energy new climate agreement (concrete per sector tar- suppliers and other interest groups. Very uniquely in get, assignment of responsibilities, cost reduction Local authorities have to be very creative when it between cooperatives and distribution system operators Europe, this was the process the government chose elements) by splitting around five “tables”: industry, comes to supporting renewable energy communities on specific smart grid projects, a problem encountered to comply with EU requirements to submit a national agriculture, buildings, mobility and electricity. with viable business plans, governance models and by a growing number of local governments across financial engineering. This means they require more Europe. in-house capacities and resources, including legal, tech- nical and financial expertise to support cooperatives All in all, this calls for a greater voice for local authorities and other community groups in their concrete projects. in European and national energy policy making as a way Such expertise can be needed in cases where local to make their needs and contribution heard and ensure FLEMISH MUNICIPALITIES ASK FOR DIRECT SAY IN REGIONAL ENERGY POLICY authorities have to act as mediator between different the corresponding capacity-building and partnership parties, for example when agreements cannot be found framework are secured. In November 2017, 11 Flemish cities published an especially with a view to becoming climate neutral open call in Flanders’ mainstream newspaper “De later, can no longer be realized by only focusing on Morgen” calling on the regional government, which low-hanging fruit. A big change is needed; a system INFLUENCING NATIONAL ENERGY AND CLIMATE PLANS has devolved competences over energy issues, to change”, says the article. To illustrate this, the cities make them “full partners of its climate policy”. The explain how they are supporting citizens and busi- The proposal for the regulation on the Governance of This means national governments should go beyond text, which was accompanied with a direct letter nesses to save energy and develop renewable ener- the Energy Union opens a window of opportunity in simple consultations and genuinely involve cities and to the minister in charge, makes reference to the gy projects, but also how this forms part of a larger that direction. Indeed, article 10 on Multilevel Climate civil society in the co-design of their plans. As the EU-aligned Covenant of Mayors objective of reduc- economic transition, including a transformation of and Energy Dialogue Platforms provides that member deadline for submission of the plans is approaching ing CO2 emissions by 40% by 2030, to which the the food and agricultural systems, which requires states should “support active engagement of local au- (end of 2019) local authorities should make sure their signatory cities have committed. “A 40% reduction, all government levels to reinforce each other. thorities, civil society organisations, business commu- voices and needs are given due consideration to ensure nity, investors, any other relevant stakeholders and the this provision does not end up a toothless instrument. general public in managing the energy transition.” 24 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 25

and convened the various project partners and society develop an appropriate business plan. In AS PROJECT PARTNER OR FACILITATOR also arbitrated between them. Because they have 2013, the cooperative was launched and the city the overview of the various projects going in their transferred full control to a board of volunteer di- Provide direct support to community energy initiatives territory and the appropriate channels to reach rectors from the local community. From the origi- out to potential project developers, local au- nal 100 founding members, the society has grown thorities can make a crucial difference in getting to include some 1 200 individuals and organisa- projects or community groups off the ground. tions. Initially focused on providing advice to help citizens switch energy suppliers and reduce their 3.8 Creating or mandating a dedicated body In the city of Plymouth in the UK, it was the local consumption, the services have now expanded council which brought together the founding to include affordable or free solutions to insulate Once the political commitment to scale-up com- In the district of Steinfurt, Germany, a task force members of a community benefit society called houses and upgrade boilers. A home energy team munity energy has been taken, the logical next consisting of the local mayors, representatives the “Plymouth Energy Community”, with the has been set-up together with a volunteering and step is to allocate the corresponding resources from public utilities and the agriculture industry initial aim to provide energy advice and efficien- training programme. In 2014, a subsidiary society and instruments to make it happen. Such plat- was set up to establish “Guidelines for Citizens’ cy solutions to vulnerable households in order to called “PEC Renewables” was also set up to “fund forms can either take the shape of information Windparks” as a way to guide and increase the tackle fuel poverty in the city. After a very exten- and build community-owned renewable energy hubs, to guide renewable energy communities participation of local stakeholders in the financing sive public engagement campaign, the city thus installations in the city”.26 towards the relevant information and know-how, and planning of these infrastructures, hence con- provided a start-up loan, a grant and helped the through the organisation of workshops and con- tributing to regional value creation. One year later, ferences and the provision of guidance materials. the “Wind Energy Service Station” was created to It can also take the shape of “one-stop-shops” to put the guidelines into practice and provide a sin- directly assist developers with concrete projects. gle contact point to citizens, local public officers, businesses, farmers, nature protection advocates, 3.10 Providing access to public sites and infrastructures At national level, Scotland provides a very em- etc. A “Wind Energy Roundtable” is also tasked blematic case of setting up supporting structures with the mission of dealing with conflict man- When budget constraints do not allow for finan- Municipal buildings such as schools, hospitals, for community energy projects. A consortium agement between people.24 In parallel, the NLF cial support, local authorities can provide sup- council offices and community centres are often made up of the national energy agency, an envi- Bürgerwind (Citizens’ wind) was also launched to port to community energy projects by providing the first target of energy cooperatives for the ronmental charity and three social enterprises is advise and accompany the community wind ini- access to public land, buildings and facilities. In location of their installations because there is an in charge of managing the Scottish Government’s tiatives in the district of Steinfurt in the planning some cases, this “in kind” support can even take expectation that their use will remain unchanged Community and Renewable Energy Scheme. With and implementation of their civic wind energy the form of direct biomass feedstock through the over long time periods and the savings achieved all information centralised on a website called projects and bring the district closer to meeting provision of municipal waste. will directly benefit the community. Savings on a “Local Energy Scotland”, the consortium provides its 2050 self-sufficiency goal.25 school electricity bill can for example be re-di- loan finance, grant-to-loan funding assistance, In Germany, more than two-thirds of cooperatives rected to improved teaching activities, modern- and specialist advice to community groups. use the roof spaces or real estate properties of isation of educational materials and equipment, municipalities to locate their installations. In the etc.27 UK, the city of Plymouth has made 32 schools and community roofs available to the Plymouth Com- 3.9 Mapping the potential and matchmaking the people munity Energy for the installation of their solar PV  projects.

Charting the renewable energy potential of a city Likewise, the 2018 version of the Paris’ plan for and its surrounding environment through dedi- climate neutrality says that in order for Parisians cated mapping instruments can be instrumental to take ownership of the carbon neutral approach in helping energy cooperatives maximize project and participate fully in achieving the goal, Paris opportunities. will encourage citizen involvement in the pro- In the city of , in 2013 the roof of duction of renewable energy, by “supporting the Frankfurt the public sport arena was made available In Ghent, the local authority has created a an launch of citizen cooperatives carrying solar pro- for the installation of a PV system financed online solar and a heat map to help residents and jects, through the identification of suitable roofs by 20 local citizens from the Rhein-Main- communities see whether certain roofs through- to deploy their installations”. Area. Yearly reporting made available on out the city were suitable for the installation of the cooperative website shows that the solar PV and find out about the heat demand In a second step, once the potential has been plant now delivers the electricity equivalent and supply opportunities, also by providing an assessed, local authorities often act as interme- of 60 households. In 2017, it mitigated 116 atlas of the geothermal potential across the city. diaries and matchmakers to help put different tonnes of CO2 emissions and generated Many other cities, such as Freiburg in Germany stakeholders around one single table. In the around EUR 44 000. and Vienna in Austria have also developed such above-mentioned case of the “Buurzame Stroom” instruments. project in Ghent, it was the city who identified ©credtis? ©csalow/unsplash.com 26 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 27

3.11 Securing finance and fundraising AS INFRASTRUCTURE OPERATOR

Beyond finding adequate partners and location called “Dak voor de Stad” providing subsidies to Manage energy infrastructure with community involvement for their projects, securing funding is obviously help rooftop PV projects with at least 100 kW of the number one challenge faced by community capacity and “solar cooperatives” with a minimum groups. Before financing the infrastructure itself, of ten members to cover the costs of purchasing they need to obtain seed funding to conduct and installing the PV systems. 3.12 Offering participation in the local utility feasibility studies, deal with project management  and all the administrative requirements linked to In addition, local authorities can become direct In certain countries, the institutional and econom- Following intensive negotiations and as an making the project bankable. Here too, local investors in citizen energy projects, taking equity ic framework make it possible for local authorities outcome of the 2009 elections, a decision was authorities can provide the much needed impulse, shares jointly with energy cooperatives. The to directly operate energy projects and infrastruc- adopted by the city council enabling citizens to as in the case of the “Bristol Community Energy financial involvement of the city also helps make tures, often through subsidiary utility companies. buy up to 10% of shares in the municipal energy Fund”, a scheme set up by the city council that projects more trustworthy and credible to other The most emblematic example is the German company. As a direct consequence of this deci- provides grants and loans to local community partners. In Denmark, the municipally-owned “Stadtwerke” model, which is raising the interest sion, the BürgerEnergie Jena eG cooperative was groups to cover the development costs of their local utility of Copenhagen has a 50% share in the of an increasing number of other cities across founded in March 2011. An extensive communica- renewable energy projects. “Middelgrundens Vindmøllelaug” offshore wind Europe. tion campaign was launched among local citizens, farm located outside the harbour, and the cooper- promoting the chance not only to benefit finan- In some cases, local authorities can also provide ative owns the other 50%. Several municipalities in Germany have taken cially from a stake in the local utility, but also to staffing resources for technical support of this local empowerment process one step further influence its commercial strategy by pushing for a specific projects. The city ofGent for example When public finances do not allow for direct by encouraging direct participation of citizens, more sustainable and socially responsible energy provided funding to the local EnerGent coopera- investments, local authorities also play an instru- often through cooperatives, in the capital of their supply. In April 2014, a 2% share was obtained by tive in order to hire an expert to support the mental role in helping community energy projects Stadtwerke, giving citizens a direct say over how some 1,000 Jena citizens, making a joint EUR 8.2 development of a smart grid project in the area. to secure funding from third parties. their utility is managed and benefitting the com- million local and traceable investment into the en- Similarly, the city council of Plymouth hosts 8.5 ­Crowdfunding for example, is becoming an ever munity at large. ergy future of their city. The BürgerEnergie Jena staff of the Plymouth Energy Community in their more popular way of financing renewable energy Eg cooperative, which has been able to distribute office and provides an additional 3 staff as in-kind projects with some platforms accepting invest- Back in 2008, such a process was initiated in a 4% dividend to its members over four consec- support to the cooperative. 10 ments starting from as little as 5 EUR. In its 2050 the university town of Jena, Germany, the sec- utive years, has been invited since January 2017 climate neutral strategy, the city of Paris identifies ond largest city in Thuringia. A member of the to sit in the advisory board of the Stadtwerke In other cases, the local authority can help crowdfunding, crowdlending and crowdequity as Stadtwerke supervisory board, who was also (previously reserved to members with a minimum communities face the high upfront costs of the a key pillar of its 2020 objective to “make Paris president of the Green Party in the city council, 5% stake), contributing to the strategic decisions renewable energy infrastructure itself. In 2017, the citizens genuine shareholders of the city’s ­ started collecting support for his idea of launch- of the utility. city of Amsterdam for example launched a rebate Climate Plan”. ing an energy cooperative to buy back third party programme for community rooftop solar projects shares in the municipal company.

3.13 Opening the capital of municipal energy projects WHAT EU FUNDING FOR RENEWABLE ENERGY COMMUNITIES? In Germany, about 40% of local utilities have In France, about 5% of the territory is supplied offered the opportunity for direct participation of by incumbent municipal distribution companies As part of the European investment and structural supported via these grants. In addition, the European citizens and cooperatives in the projects that they which had the opportunity to remain independent funds, a number of relevant financing sources can Covenant of Mayors also offers a useful interactive operate. By way of example, the Stadtwerke Un- after the 1946 law on the nationalisation of the be harnessed by renewable energy communities funding guide providing an overview of the various ion Nordhessen, which gathers municipal utilities electricity and gas sectors. Their local anchorage including the instrument called “Community-led other financing opportunities. It provides informa- from the Northern Hesse region, opened up some and proximity with customers is also pushing Local Development” which supports bottom-up tion on initiatives managed by the European Union, 75% of its projects to participation of community these entities towards more direct participation. territorial development strategies. In the same spirit the Member States and key financial institutions entities and neighbouring local authorities, raising In Grenoble, in the French Alps, the local utility’s than the new community energy provisions of the such as the European Investment Bank. The guide some 70 million euros in the process. Likewise, mission statement says it would like to “recon- renewable energy directive, the community-led local also includes information about support services the Augsbourg Stadtwerke in Bavaria used this nect citizens with energy issues through open development must include local action groups in the and innovative financing schemes. In addition, the model to finance a hydropower project and two approaches bringing together the local stakehold- driving seat with an adequate representation of Covenant of Mayors Office regularly publishes solar plants, raising 20 million euros in the span of ers”. In this spirit, the utility plans to provide other “public and private local socio-economic interests.”- information on innovative financing schemes just four weeks. A large majority of utilities in Ger- local authorities with the opportunity to enter the Capacity building projects and participatory pro- implemented by its signatory cities and how they many see this participatory finance approach as a capital of projects and to promote citizen partici- cesses to build community ownership can be can be replicated. way to maintain trust and loyalty among citizens patory financing. and increase overall project acceptance. 5 28 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 29

ENERGY FOR PEOPLE, NOT FOR PROFIT”, LONDON MAYOR COMMITS TO CREATE LOCAL UTILITY MUNICIPAL “ENERGY BONDS” IN SWINDON, UK FOLLOWING CITIZENS CAMPAIGN

The city of Swindon in the UK, plans to develop receiving between 5 and 6% annual return of their Ahead of the 2016 local elections, the “Switched of these positions for women. Another proposal a low-carbon economy by 2030. The municipal investment. A few months later, the municipal com- on London” campaign advocated actively for the was to rely on advisory neighbourhood assemblies energy company (wholly owned by the city council) pany used the same mechanism to co-fund the 5MW launch of a 100% public energy company to be set- to guarantee widespread community involvement. partnered in 2016 with a green investment platform “Chapel Farm” on a former landfill site owned by the up in the capital. Following his election as Mayor, In addition, on the campaign website, advocates called Abundance to co-finance two solar wind local authority. This second project allowed citizens Sadiq Khan committed to create the not-for-prof- call for a company that is “socially just and tackles farms.28 to receive a tax-free return on their investment of it “Energy for Londoners” company. Among the energy poverty through a fair pricing system and 6% for 20 years while helping their local authority to concrete recommendations of the campaigners was household energy efficiency investment” and which For the first 4.8 MW wind plant, called “Common redirect part of the profits to other important local that of creating a governing board composed of is “ecologically sustainable through a commitment Farm”, the city was able to collect some £1.8 million community projects.29 one third London local government representatives, to selling 100% renewable energy as soon as is from citizens in just two months (instead of the one third elected energy company employees and feasible, with partnerships with local community allocated three) and contributed the remaining £3 Such innovative fundraising schemes to leverage cit- one third ordinary London residents, reserving half generation schemes.” million. With adverts published in the local railway izens’ savings are increasingly seen as a solution by station and evening news, citizens were offered European local authorities facing austerity measures the opportunity to invest as little as £5. After the imposed by their national governments. first year of operation, local residents were already

3.14 Joining efforts on remunicipalisation campaigns CONCLUSION A growing number of communities across Europe have, for example, identified the opportunity are wishing to team up with their local repre- to tap waste heat from a copper furnace in the sentatives to regain control over key local infra- South East of the city, to replace part of the structures and “commons”. Transition movements current fossil fuel energy sources. across the continent increasingly call for a shared City to citizen partnerships are starting to form the are thus taking shape across Europe. The Clean Ener- ownership and management of resources and In the 12 000 inhabitant Black Forest city of backbone of the new governance models around the gy Package for all Europeans is meant to provide a facilities. These movements are sometimes linked Titisee-Neustadt, the remunicipalisation process energy transition. It is clear that there is a need to boost to the emergence and scale-up of these “energy to broader political objectives of local economic was carried out in partnership with the citizens. further understand, nurture, and support such rela- communities” and it is now up to each city, region and regeneration or reindustrialisation. In 2011, the city started collective financial support tionships – especially as they are so clearly mutually nation to give flesh and blood to these new definitions. from the citizens via the creation of a new local beneficial. One of the most prominent cases of citizen-led cooperative which now owns a 10% stake in the EU member states should thus make sure their cities remunicipalisation movements is probably that of project. The historical cooperative utility company Local authorities’ support to and involvement in com- have the right human resources, legal competences, Hamburg in Germany. Back in 2013, following the EWS Schönau, which was born as part of the munity energy movements contribute to local econom- technical expertise and financial leverage to usher in three-year campaign “Our Hamburg, our grid”, a anti-nuclear movement and now supplies ic development as well as social justice and cohesion. new forms of governance models in the energy system. referendum saw 50.9% of citizens voting in favour 170 000 customers, also provided 30% of the They help create new democratic spaces for citizen Setting a high level target for local and community of the remunicipalisation of the electricity, heat capital to buy the network as well as technical engagement in public life, improve the city’s resilience energy ownership of renewable energy capacity, as and gas networks. The takeover of the electricity expertise in municipal takeovers and operational by reducing its import dependency and ultimately also was done in Scotland, is an efficient way of ensuring grid was finalised in 2016 without any job loss- management. 5 create new expertise among local administrations. the corresponding enabling framework is put in es as the entire staff was maintained, contrary place. National Energy and Climate Plans, due to to what trade unions had feared ahead of the Similarly, Haßfurt, a city of around 13 000 inhab- Cities can use several levers and strategies to main- be submitted by the end of 2019, should provide process. The gas grid was transferred to full city itants in the region of Bavaria, raised some 1.5 stream citizen energy projects. As shown in this guide- the perfect opportunity to plan future energy ownership in 2018 and the heating network will million EUR via a citizen cooperative to co-finance book, there are some structuring building blocks to any scenarios with due consideration of these local be purchased by the city by 1 January 2019. Today, the partial takeover of the distribution network. sound community energy strategy including the adop- movements and in cooperation with them. the municipal utility focuses on selling local, It is interesting to note that before this remunici- tion of long-term targets, the mapping of local potential mostly green, energy and is driven by climate and palisation momentum, German citizens and coop- and the networking of all relevant stakeholders. Based socio-economic imperatives rather than profit eratives also heavily campaigned in some cities to on their local room for manoeuvre – often determined maximisation. Unlike the above-mentioned cases, stop attempts to privatise municipal assets. This is by the national context – the local authorities can then the Hamburg model does not include direct citi- for example what happened in the city of Leipzig, take over various roles, from strategic advisors to pro- zen participation as active decision makers in the where a large citizen mobilisation led to a local ject partners, infrastructure operators, etc. utility. However, the local cooperative plays an im- referendum to counter the project of the Social portant role in organising debates to encourage Democrat Mayor to sell shares of the municipal New models of joint energy management with citizens, the municipality to identify renewable sources for company to the French utility Engie (formerly including via the creation of local energy companies the future operation of the district heating net- Gaz de France). or through social enterprises and citizen cooperatives work. Called “Wärmedialogue”, these exchanges 30 Guidelines for local and regional policy makers Guidelines for local and regional policy makers 31

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www.renewables-networking.eu

Date of publication May 2019

Author Alix Bolle, Energy Cities

Graphic design unger+ kreative strategen GmbH, www.ungerplus.de

Contributors and reviewers » Andreas Rüdinger, Institute for Sustainable Development and International Relations (IDDRI) » Josh Roberts, Rescoop.eu » Sofie Verhoeven, City of Ghent » Sonia Dunlop, Solar Power Europe » Frédéric Boyer, Sara Giovannini, Adrian Hiel and Claire Roumet, Energy Cities

Licence Creative Commons Attribution – NonCommercial – ShareAlike 4.0 International – ISBN 978-2-490384-03-7